80 PROVISION OF BORROWING FACILITIES. 



the Act. The question of the amendment of the Act was very 

 carefully considered before the Legislative Department undertook the 

 drafting of this Bill. Two annual Conferences have considered what 

 changes are needed, and Local Governments have been consulted on a 

 rough draft of a Bill framed at the Conference of 1909. 



I will to-day only mention those points in the Bill which are of 

 special importance. I have already touched on the need of providing 

 for Co-operative other than merely Credit Societies, and I need sa} r 

 no more regarding this. Another important change relates to the 

 classification of societies. Under the existing Act the classification 

 of societies depends on whether or no the members of the societies are 

 mainly agriculturists. The main division is into rural and urban 

 societies. In a rural society not less than four-fifths of the members 

 must be agriculturists. In an urban society not less than four-fifths 

 of the members must be non-agriculturists ; and in a rural society, 

 save with the special consent of the Local Government, the liability 

 of the members is unlimited. This classification was objected to at 

 the time by many critics, notably by MR. WOLVK, and experience has 

 shown that the critics were right. SIR DENTZIL IBBETSON, when 

 introducing the Bill, pointed out that in the case of rural societies, 

 unlimited liability was best suited to the agricultural classes to whom 

 such societies are confined, and no doubt it is generally the case that 

 unlimited liability is best for a society of small agriculturists, as it 

 ensures caution in admission to membership and strict control over the 

 manner in which loans are spent and the purposes to which they are 

 devoted. All these considerations, however, apply with equal force 

 in many other cases ; take, for instance, a small society of weavers 

 working together in one place whether in the town or in the country. 

 Again, a rural society may consist of a number of well-to-do people 

 who could derive great advantage from co-operating but who are 

 not prepared to undertake unlimited liability for one another's debts. 

 The true distinction appears to be between limited and unlimited 

 societies. In many cases urban societies should be unlimited. In 

 some cases there is no reason why rural societies should not be formed 

 of limited liability. 



There is likely to be more difference of opinion regarding the 

 provisions of section 28 of the Bill permitting of the distribution of 

 profits on certain conditions to members of societies of unlimited 

 liability. The distribution of profits is permitted even under the 



